Low Sulphur to Increase Costs

The International Maritime Organisation (IMO) are introducing new low sulphur regulations with effect from January 2020, which will effectively mean that shipping lines will have to reduce emissions by 85%.

The regulation aims to reduce the environmental impact of sulphur emitted by container ships and is expected to increase supply chain costs in the process.

The early suggestion is that the increased costs could result in additional charges of $160 per TEU (twenty foot equivalent unit) on average, depending on the trade and journey length. Exporters and Importers can expect to see the cost of these new regulations passed on through fuel and bunker surcharges.

Mathieu Friedberg of Shipping Line CGM CMA explained in a recent announcement from the world’s third largest steamship line:

“The implementation of this new regulation, which represents a major environmental advance for our sector, will affect all players in the shipping industry”.

“In line with its commitments, the Group will comply with the regulation issued by the IMO as from 1 January 2020. In this context, we will inevitably have to review our sales policy regarding fuel surcharges”

Supply Chain News from the Supply Chain Academy. The only learning resource centre focused solely on the subject of supply chain, for more information call 01708 259450 or email info@supplychainacademy.org.uk

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